IHS Markit has expanded its alternative data offering for asset managers with the launch of new stock selection and strategy signals covering the automotive sector.
Covering more than 30 auto manufacturers worldwide and providing more than 10 years of historical data, the 32 new factors are designed to assist in the prediction of stock returns using analytics derived from company-specific datapoints on sales, production and market share. They include multiple financial factors for revenue and sales as well as novel factors covering production of electric vehicles and plant utilisation.
Analysis by the Research Signals service at IHS Markit finds positive alpha in several of the factors, including, at times, a return spread of up to 1.41 per cent for the Monthly Trend in Production Growth factor and up to 2.64 per cent return spread for the Monthly Trend in Sales Growth factor.
“Quantitative and fundamental investment funds are deeply interested in the unmatched scope and quality of alternative data produced by IHS Markit covering virtually every industry sector,” says David Riehl (pictured), executive director in the equities data and analytics group at IHS Markit. “Using our rich datasets in automotive to create these new factors expands our library to more than 600 signals and models and gives investors unique tools for assessing one of the world’s most important sectors.”
Data inputs for the signals are mined from robust statistical automotive datasets from IHS Markit that include vehicle sales and production history, aggregated registration information, manufacturing volumes and vehicle pricing insight for multiple geographies.
According to Greenwich Associates, 50 per cent of institutional investors are planning to increase their usage of alternative datasets.
Automotive data joins several other alternative datasets already deployed in the Research Signals factor library.
“Investment managers understand that alternative datasets can provide perspective not present in market data and financial statements,” says Riehl. “The challenge for most is turning data into actionable insight. While some firms consume our raw data, many others prefer us to deliver our expertise in sourcing, structuring and validating alternative data through prepackaged analytics like the new automotive signals.”
Research Signals delivers valuable investment insights through a comprehensive library of more than 600 global stock selection and strategy signals. The service covers more than 30,000 securities across 80 countries. It extracts valuable investment insights from a broad range of raw financial and industry-specific data sources to enable customers to assess intended and unintended exposures across investment themes.
